Bankruptcy?

Firs to all, I want to clarify for you that BANKRUPTCY will stay on your credit records for 10 years! That's starting from the date the judge discharges your debts, NOT when you file it. So for example, you file for bankruptcy today but the judge doesn't approve it until a year later. That means your bankruptcy will not fall of your credit report until 11 years from now!

PLAYING THE CREDIT GAME

If you live in the U.S., whatever you do, DON'T PAY THESE BILLS OFF WITHOUT FIRST READING WHAT I WROTE BELOW!!!

HOW BILL COLLECTORS WORK

When you have bad debt that goes into collections (after being late/unpaid for 180 days), these debts are sold off to bill collectors (essentially, scum bags run by the mafia). The original bank or creditor is no longer collecting it. Instead, it gets auctioned off to scum bags who buy it for pennies on the dollar. What they do is they turn around and try to scam you for the full value of the original debt PLUS interest and penalties, which can almost double or triple the original balance.

To get these removed from your credit report or to pay it off, you have several options:

DON'T NEGOTIATE WITH TERRORISTS OR SCUM BAGS

Send a cease-and-decist letter to the bill collectors, which basically tells them to shove it. This is mentioned in section 805c of the "THE FAIR DEBT COLLECTION PRACTICES ACT".

Here's an excerpt:

----------------- except from FDCACT Section 805c -----------------

"(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --

(1) to advise the consumer that the debt collector's further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt."

----------------- except from FDCACT Section 805c -----------------

By law, the debt collect must return the debt as unpaid/uncollected to the original bank/creditor and destroy your records, or they can take legal procedings against you. They are allowed to contact you in writing ONE LAST TIME to inform you of their actions (ie. if they are suing you, if they're returning the debt to the collector, if they're going to run off and cry to their mommy, etc.). Unless you've got valueable assets, the most they'll do is probably terminate the collection.

If you don't know how to write a cease-and-decist letter, there's plenty of websites that will provide templates for cease-and-decist letters.

NOTE: This does NOT apply to the original creditor, only debt collectors. Legally, you will still owe the original creditor!

REMOVING THE NEGATIVE ENTRIES

After a little over 1 month of sending the cease-and-decist letter, contact each credit bureau where you have these negative entries and request to have these debts verified/validated. The credit bureau will then contact the collector and the collector will be unable to locate your records (per having destroyed your records after the cease-and-decist letter), and the credit bureau will be forced to remove that negative entry.

Once the entry has been removed, contact the original bank/creditor IN WRITING and arrange to make FULL payments in return for a "paid as agreed" entry on your credit report, OR simply removing the account from your credit report altogether. Make sure you get this agreement from them in writing before sending even a dime to them!

THAT'S TOO MUCH WORK, I JUST WANT TO PAY IT OFF

If you don't want to deal with all the steps above, simply contact the creditor/collector IN WRITING and get them to agree to mark the entry as "paid as agreed" or remove the negative entry from your report in return for full or settled payment. Make sure you get this in writing!

I'M A LITTLE BASTARD SHORT AND STOUT...

If you're a little bastard and simple don't want to pay, just wait until the statutes of limitation pass and then you're scott free and they can no longer collect a dime from you. Of course, there's your guilty conscience and the ghost of Christmas past that will haunt you for life!

Also, if you choose to be a bastard and you own any valuable property or have any large amounts of cash stashed in a financial account (such as a house, an expensive car or boat, stock brokers, IRAs, savings, checkings, EXCEPT for 401k's and perhaps 403b's which are protected from creditors), there is a chance the creditor or debt collector could sue you. This really depends on your state.

As for your credit, it takes 7 years from the date the account went into collections to fall off your credit report. Don't make any payments or disputes or requests to verify/validate a debt unless you intend to pay it off! You could easily screw yourself over!!! If you make a partial payment or unsuccessfully dispute or verify/validate a debt, it'll reset the 7 year clock.

For a list of statutes of limitation for debt, check out this website:

http://www.bankrate.com/brm/news/cc/20040116b2.asp

ONE LAST TIP

As an additional tip, by law, debt collectors cannot threaten or harass you. This includes neighbors, friends, family, and empty threats of lawsuits or arrests. If they do, they're violating your fair credit reporting act rights and you can sue the MOFO's for violation of your rights!

To learn more about your rights under the "THE FAIR DEBT COLLECTION PRACTICES ACT", you can either read the FDC's tip page below:

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm

Or check out the Wikipedia entry here:

http://en.wikipedia.org/wiki/Fair_Debt_Collection_...

If a bastard debt collector is harassing you or violating any of your rights, file a complaint! Be sure to keep document every phone conversation, snail mail, or harassment you experience.

https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_C...

CAN ANYONE TESTIFY TO THIS?

In my own personal experience, I owed over $30k in debt that I couldn't pay off due to being laid off during the dot-com bust. The collectors want over $60k after penalties and interest. I laugh in their face. I haven't paid a dime and I sleep very well at night. I only have 2 more years to go before I have a perfectly clean credit, and 1 more year to go before I'm off scott free. I guess I took the bastardly approach! But whatever. I don't see the difference between being a bastard and filing for bankruptcy; they're both bastardly!!! Just that a bankruptcy will screw you over longer (10 years instead of 7). Doesn't take a genius to figure out which option is easier.

Just an FYI, even with my bad debt, I just bought a new car for 14.9% APR through CitiFinancial. Not bad!

Bankruptcy is governed by the Federal branch iof our government. Under the old laws, just about everything could be written off under the bankruptcy laws. It would require you to make a monthly payment to the standing trustee for your area for a period of 5 years, usually, it was a small percentage of what was originally owed, that you would wind up paying.The money paid in would pay your court costs, attorneys fees, and about 1/2 of what was originally owed. There are several levels of bankruptcy, Chapter 7, Chapter11, and Chapter 13. You can get a pretty good explanation of what each on does and which one would be better for you from Internet searches. There are pros and cons tofiling bankruptcy, but the end result is usually worth the time and trouble, even under the new laws.

For your information, most lawyers will give you a pretty good run down of what your options are in an initial interview that usually is free. Because the bankruptcy laws are under federal guidelines, lawyers who deal with bankruptcy usually are tightly governed, to protect the consumer and the courts, thereby eliminating worrying about whether they are on the up and up. If you decide to file through a lawyer, he will require a filing fee that you will pay to begin the process. This is usually around $200.00. In your case, it sounds as if your main debt is credit card debt. I would act to eliminate that debt ASAP. You know that the credit card companies are heartless when it comes to penalties and interest. A few years ago, some card companies had figured out a plan to rape card holders by sending out the payments real close to the due date, so that by the time the cardholder received his/statement, the due date had already passed. They would then collect a late payment and if it happened more than once, they would raise your interest rate, saying you were responsible and should know when the due date is. Thus far, I believe they have gotten by with this and continue to do so.

So, it would benefit you to put the brakes on the credit card companies that do act in this manner.

I don't know much about bankruptcy, other than the fact that it will ALWAYS be there, and it will look bad bad to anyone who checks your credit (like if you need a car, or you try to get a job, or you have to move to a place where your landlord does a credit check).

You should seriously consider credit counseling. They can work with you and with the credit company to get your payments lowered DRASTICALLY, which is something the creditors won't do for you. It will help you rebuild your credit, and you can have the satisfaction of knowing you've climbed out of the hole and hopefully are better on the other side.

Over a period of time, the regular payments you're making on items already in your report will reflect a positive report. I promise, though, bankruptcy is gonna look worse than anything you've got in there, and after you do it, you can't work your way out of it.

You mention you're getting letters from credit companies unwilling to take a smaller payment. Personal experience and common sense has told me that they will not send your money back. Even if you aren't making the required payment, if you're sending in something, they'll take it. The minimum payment is the minimum you can pay and avoid a negative mark.

I would look into debt consolidation and/or credit counseling. Most places have a free consultation, so try it and see what you think. It certainly can't hurt.

Rules have changed that make it harder to go through bankruptcy, like you need to attend a debt management class, but a lot of the rules have not changed. Unsecured debt, like credit card debt, can be released. If you have a car and like it and are not upside down by a lot, meaning you don't owe a lot more than it is worth than it is good to keep that to keep a low interest rate. If you have a house, you do the same with that. IT is sometimes better to try to file a version of bankruptcy where it is court enforced arrangements rather than a full blown Chapter 7, but they both kind of make you start over from a credit perspective.

Sounds like you can probably do a Chapter 7 (erase all debts and start over) rather than a Chapter 13 (restructure debts and try again) since you don't make much money. Here is a link that will get you started -- "12 myths about bankruptcy"

http://moneycentral.msn.com/content/Banking/bankru...

The MSN Money website has quite a few links so feel free to search on their site. Also try www.nolo.com, which is a law website that explains things in pretty basic terms. There are specific income levels attributable to each state so make sure to look up your state in particular. Hope you have better days ahead.

You don't have to be rich to pay off debt.

Do not declare bankruptcy. Bad credit stays on your report for 7-10 years; bankruptcy will always stay there. Some employers won't even hire you if you have declare bankruptcy. It's an easy way out to a not-impossible solution. Anytime you apply for a loan, you're going to be tossed aside.

I suggest Dave Ramsey. He seriously save our lives.

First off, get rid of the credit cards. You don't need those.

Next, write down your debts from greatest to least. Your goal is to get through that smallest debt first and work your way up.

Having a family is tough, but if you're willing to declare bankruptcy then you're willing to do what it takes. Get a second job. Work hard for 13 months to pay off as much as you can. Forgo the frivolous things this year.

There are some other options. Go to a credit counseling service. Your local United Way office may have a local affilation. Or if the accounts are charged off you can try to settle on them. That is when you agree with the creditor to pay a percentage of the balance.

I'll hook you up with $100 in exchange for a whole night of...

i would suggest that you look at any and every other option out there rather than bankruptsy.

www.daveramsey.com